Hoa Duong, economist at PwC, says,
“Ahead of the Spring Statement, the Chancellor has the tough job of explaining why the UK has lost its first month of budget surplus. The data shows February adding a further £13bn to the government deficit after just one month of spending less money than it received in taxes and other income.
“The lost progress in the UK’s public finances may just be the beginning of another period of mounting costs. The growing pressures of increasing the defence budget and easing household living costs could exacerbate the deficit in the coming months. Two years after taking office in February 2020, Rishi Sunak is still facing a 40% higher budget deficit and 10% higher national debt.
“In the Spring Statement, we expect the Chancellor to continue his cautious approach and prioritise balancing the books. Therefore any financial support, including reducing pressure on households' cost of living, is likely to be limited. ”
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